Friday, February 7, 2014

How to Price a Ticket in Two Easy Steps: Educate and Mislead



 

Step Two: Mislead

Now don’t jump to conclusions…I’m not the kind of person who lies. My mom would kill me.

A 1987 New York Times Article feared the idea that prices for orchestra seating at a Broadway musical could hit $50. Adjusted for inflation, that would be $99 today. 

The idea that you can pay less than $100 for a full priced ticket to a Broadway show today is laughable. A top ticket for After Midnight will run you $197, and that’s not even in the top 10 of ticket prices. A premium ticket for Book of Mormon goes for $477. Now, we all know that most people are not going to pay $200-$400 for a theatre ticket. So how do these tickets sell?

TKTS

A recent conversation with a Broadway producer friend helps shed some light. TKTS is a “discount” ticket outlet where you can get deals on Broadway shows. They offer up to 50% off your favorite shows, bringing the price back down to $100 for After Midnight. As it happens, that value is right in line with the inflation-adjusted value of a Broadway ticket in 1987. So, when you get your “sale,” you are really paying what Broadway tickets have always cost. 

TKTS is a built-in marketing engine for nearly every show. When the patron thinks they’re getting a discount, they will wait in line for an hour in the middle of a snowstorm (I’ve done it), just to snag the deal. It’s not rational, but instinctual customer behavior. When setting prices, producers aren’t counting on all patrons to pay the face value (of course, when it happens, they won’t complain).

As a producer, it’s troublesome to think that the only way to sell my product is by discounting its value. I’m lucky to work on things that I’m really proud of, so each discount chips away at my ego a bit.
But like I said, I have stood in the snow for an hour to get that discount. I understand the marketing philosophy – even if I don’t like it.

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